Through both apathy and fear, South Africa’s businessmen and women have allowed local law making to become hopelessly inconsistent with the doctrine of ‘the rule of law’, a principle that underpins our entire Constitution. The ‘rule of law’ requires a government that is predictable, consistent, operates according to strict and known criteria and, most important of all, is not able to act arbitrarily or at the personal whim of one or more officials. The rule of law is not the “good” or “effective” enforcement of the law, it is a separate legal doctrine that informs our entire body of law, a principle fully endorsed once again by the Constitutional Court in the Van der Walt case.
When we operate from the firm understanding that South Africa must be governed by predictable, known, and non-arbitrary decisions, then it follows that those who are affected by government decisions should feel comfortable when speaking out against a government that does not live up to this standard. All citizens, as well as entrepreneurs and providers of goods and services must have the freedom to openly oppose government, especially capricious officials, without fear of retribution.
In theory we have this right. However, in practice this is often not the case, especially in industries where the dead hand of government is felt every day, And it all boils down to a combination of government’s utter disregard for the rule of law, to bullying regulators, and to business fear and apathy.
The financial services industry immediately comes to my mind, where two decades of endless regulatory “reform” has heralded a “state within the state” in which civil servants have their own quasi-law making bodies, along with their own tribunals which adjudicate disputes and keep and spend the fines that they levy. The mining industry is another that is similarly plagued and entirely dependent upon the grace and favour of their regulatory overlords to grant them licences and permits, virtually at their whim.
Bureaucratic empires with their own system of law making and where each industry segment is run much like a personal fiefdom, have no place in constitutional South Africa.
The bullying is not always overt, of course. More often than not it is simply the fear of being bullied or dealt with unfairly or arbitrarily by bureaucrats that makes companies keep quiet. These companies may well have nothing to hide but vindictive government investigations, closures or suspensions can take up a great deal of executive time and quickly run into millions of lost rands – both for the company and the fiscus.
Last year the Labour Court set aside a decision by the Mine Health and Safety Inspectorate which brought all operations at a listed gold mine to a standstill, costing the company and the country many millions in lost productivity. Whilst this was more a case of bad judgment than one of bullying, mining houses would clearly rather prostrate themselves in supine obeisance than risk upsetting these salaried wards of the state and have something similar happen again. The Labour Court found that the Inspectorate acted irrationally, but the Inspectorate nonetheless retains these dictatorial powers due to our parliamentarians having forgotten the rule of law provisions of our Constitution. Indeed, the fact that our laws even remotely allow officialdom to act virtually unfettered is an insult to South Africa’s legal order.
To add insult to injury, these government departments have an endless supply of money to fund the legal battles that are (all too rarely) launched against it by firms that are fed up with what they consider unbearable, government-created anti-growth conditions. Whereas companies rely on funds earned by serving the market, these bureaucratic fiefdoms are able to launch virtually endless challenges using the bottomless pit of taxpayer money. After years of litigation, many firms simply give up and go where they are welcomed and where the rule of law applies.
South Africa can no longer afford a mentality of apathy and fear, a mentality that was abandoned during the later years of Apartheid, and resulted in our winning a constitutional democracy. It can and must be re-won as we re-teach our politicians the meaning of ‘the rule of law’.
Author Martin van Staden is Legal Researcher at the Free Market Foundation and Academic Programs Director of Students For Liberty in Southern Africa. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.
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